Business / Companies
Turnall continues to surpass expectations
31 Aug 2011 at 09:11hrs | Views
Turnall's performance continues to surpass expectations, driven by the aggressive and innovative management team (targeting annual turnover of $300 million by FY 2015). Sales volumes for the interim amounted to 36,000 tonnes up 26% from the prior period largely due to high demand for building products.
Local authorities projects on sewer and water reticulation also resulted in a 128% growth in pipe sales volumes. Turnover thus grew by 63% to $22.2 million, with exports contributing less than 1% of total turnover due to the asbestos ban in Mozambique and South Africa.
Cost of sales grew by a much higher 68% due to the high cost of imported chrysolite at $1,200/tonne against the $650/tonne which the company used to pay when they used to source the product locally. Thus the cost/income ratio is likely to continue averaging 70% compared to the historic 55% as long as the company is importing.
Net finance costs totalled $728,317 up by 672% as the company took on short term debt to finance its working capital. This was necessitated by the need to build up three to four month's fibre stocks to alleviate the long lead times. The attributable profit for the period at $1.3 million up 33% from $984,527 for H1 2010.
Thus fibre stock held at half year amounted to $6 million. Rates on the borrowings are 6% on the PTA $4 million long term loan and an average of 18% on the short term loans.
Management is considering options to restructure the debt. The $3 million growth in PPE relates to the amount that was used to complete the purchase of the new machinery.
The company's outlook is based on three areas, notably, local building products including GCIS, pipe products and exports. In terms of demand outlook, the second half generally accounts for 60% of sales volume. YTD volumes at 60,000 tonnes are 41% ahead of the same period last year, whilst YTD July operating profit is 76% ahead of last year.
The pipe order book of 3,000 tonnes is fairly strong on local authorities pipe demand. The export performance has changes post the interim period, and export volumes are expected to be key in H2 2011, with the new asbestos free manufacturing machine now operational.
Exports commenced in mid June and sales of $1 million have already been made. The order book currently stands at ZAR 20.0m. The technology should enable further penetration into South Africa, Mozambique and Botswana. Management envision a return to 20% to 30% exports volume contribution to the group. The housing backlog both locally and in the region, need for safe water and sanitation facilities definitely pose unlimited business opportunities for Turnall.
Local authorities projects on sewer and water reticulation also resulted in a 128% growth in pipe sales volumes. Turnover thus grew by 63% to $22.2 million, with exports contributing less than 1% of total turnover due to the asbestos ban in Mozambique and South Africa.
Cost of sales grew by a much higher 68% due to the high cost of imported chrysolite at $1,200/tonne against the $650/tonne which the company used to pay when they used to source the product locally. Thus the cost/income ratio is likely to continue averaging 70% compared to the historic 55% as long as the company is importing.
Net finance costs totalled $728,317 up by 672% as the company took on short term debt to finance its working capital. This was necessitated by the need to build up three to four month's fibre stocks to alleviate the long lead times. The attributable profit for the period at $1.3 million up 33% from $984,527 for H1 2010.
Thus fibre stock held at half year amounted to $6 million. Rates on the borrowings are 6% on the PTA $4 million long term loan and an average of 18% on the short term loans.
Management is considering options to restructure the debt. The $3 million growth in PPE relates to the amount that was used to complete the purchase of the new machinery.
The company's outlook is based on three areas, notably, local building products including GCIS, pipe products and exports. In terms of demand outlook, the second half generally accounts for 60% of sales volume. YTD volumes at 60,000 tonnes are 41% ahead of the same period last year, whilst YTD July operating profit is 76% ahead of last year.
The pipe order book of 3,000 tonnes is fairly strong on local authorities pipe demand. The export performance has changes post the interim period, and export volumes are expected to be key in H2 2011, with the new asbestos free manufacturing machine now operational.
Exports commenced in mid June and sales of $1 million have already been made. The order book currently stands at ZAR 20.0m. The technology should enable further penetration into South Africa, Mozambique and Botswana. Management envision a return to 20% to 30% exports volume contribution to the group. The housing backlog both locally and in the region, need for safe water and sanitation facilities definitely pose unlimited business opportunities for Turnall.
Source - Imara Stockbrokers
